Ravenhill Theories of Globalization: Regionalism

Ravenhill

Theories of Globalization: Regionalism and Hyperglobalization According to Ravenhill

How does regionalism relate to globalization? If economic globalization aims for an integrated global economy, do regional organizations like the European Union, ASEAN, North American Free Trade Agreement help or hinder this global economic integration?

The process of globalization hinges on the participation of all parties. The intention has largely been to achieve a connection between political orientation, diplomatic alignment and economic design. This depends heavily on the coalescence of all parties large and small. As the last two decades in particular have demonstrated, this is not a transformation which occurs overnight, nor is it immediately compatible with the culture and context of every nation. This is why, the Ravenhill (2005) text addresses regionalism as being an important aspect of this evolving process by which globalization is achieved.

Ravenhill reports that there is indeed a concerted effort to support and even administrate the formulation of Regional Trade Agreements (RTAs), which help to create unions centered on geographical distribution, historical ties based on this proximity and a set of shared economic and political interests. Ravenhill indicates that "RTAs are the most important exception that the WTO permits to the principle that countries should not discriminate in their treatment of other members. Parties to regional arrangements are obliged to notify the WTO of the details of their agreements." (Ravenhill, 173) Indeed, it is necessary for all aspects of a Regional Trade Agreement to be compliant with the laws and conditions provided for by the WTO. This demonstrates the extent to which regionalism is to be viewed as a pathway to greater expansion of the free trade agenda.

It is thus that such regionally based agreements as the ASEAN or NAFTA are constructed as a way to facilitate globalization on the whole. Taking NAFTA into consideration, we may observe that the easing of trade limitations or restrictions between the countries of the North American continent is consistent with the primary avenue to globalization. The regionally based agreement would establish a greater alignment between the United States, Canada and Mexico, three nations of divergent economic realities and yet united in their interest in the prosperity of the continent. This is a fundamental demonstration of the trade liberalization theories providing the basis for globalization. Often, it falls upon regional leaders and economic powers to help their neighbors enter into the world economy.

To the point, one of the reasons the WTO provides a framework of encouragement for regional trade is the clear correlation between this and the proliferation of free trade in general. Such is to say that the "growth in regionalism has led to a marked increase in the share of worldwide trade conducted within regional trade agreements, now accounting for roughly a-half of world trade." (Ravenhill, 173) Though the intention is ultimately for globalization to facilitate something of an elimination of all boundaries between participants in the world economy, transcending culture, region and history, at present the formulation of regions provides a basis for this larger endeavor.

Regional agreement function to establish strong interdependency between nations in a region, providing an impetus for those on the outside to achieve entrance. With this entrance comes a number of obligations that are economical, humanitarian and political. In all of these is anticipated the greater spread of democracy, capitalism and a raised standard of living in the developing world. Through regional agreements, globalization can begin to encourage and enforce the kinds of changes which are demanded in prospective members of the aligned global community.

What is the hyperglobalization thesis? what does it predict with regard to the nation-state ability to maintain its tax structure, its labor regulation, and its environmental regulations? Is this a real threat and do nations take the threat seriously ?

Still, not all of the effects of globalization are viewed as positive. In the decades which have passed since the end of the Cold War, some of the inherent dangers in instigating massive institutional transformation have come to the surface. There are implicit threats in the transition of the developing world from dictatorial to democratic governance, in the change to regional forms of currency, in the adoption of free market principles and in the engagement of private enterprises from the developed world.

All of these may instigate what is known as hyperglobalization. This is the negative fallout from the rapid transition of developing nations toward participation in a world economy that includes considerably larger-scaled economic trade partners. As Ravenhill reports, "a combination of the exit threats and concerns arising from the hyperglobalization thesis about the likelihood of exit may well have had an independent effect on the trajectory of fiscal and labour market reform." (Ravenhill, 321)

In a sense, developing nations which are seized upon initially as partners in the global trade often suffering something of a market-correction. Over-speculation by private enterprises often leads to the exit that Ravenhill discusses above, in which private enterprises move on from a market such Mexico -- first opened up by NAFTA -- to one such as Indonesia -- which CAFTA would open up to companies interested in even cheaper labor. The flight from Mexico would lead to a massive suckout of economic fortunes, with the painful economic retraction demonstrating the real threat of wanton proliferation of trade.

This is particularly so given the perspective which globalization advocates take toward nation-state programs, government intervention and civilian tax programs. These are considered anathema, and hyperglobalization is often blamed on the over-involvement of taxation in economic affairs. As Ravenhill tells, global capitalists of the purest intent would argue that "the welfare state is, for business, merely a drain on profits. Such assumptions reflect a narrowly Anglo-U.S. Conception of competitiveness -- and as we shall see presently, are difficult to reconcile with the empirical evidence. Though ever more influential, the hyperglobalization thesis extrapolates wildly and inappropriately from labour-intensive sectors of the international economy in which competitiveness is conventionally enhanced in this way to the global economy more generally." (Ravenhill, 321)